Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2010 (9) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2010 (9) TMI 846 - HC - Income TaxSpeculative business - whether the Tribunal was justified in allowing business loss claimed by the assessee on purchase and sale of units of the Unit Trust of India? – assessee is a plantation company engaged essentially in production and sale of tea. Held that:- the assessee purchased 15 lakh units in May 1990, i.e., shortly before declaration of the dividend and the sale is immediately after declaration of dividend and both the transactions are with one company which gave loan for the purchase of the units and also repurchased the same units as stated above. The speculation involved is obvious i.e., the possibility of getting more in tax saving combined with the dividend likely to be received over the loss suffered and expenditure incurred by way of interest and charges paid to the broker. Therefore, in our view, the transaction of purchase and sale of units when done as a business in a speculative manner, the loss therefrom could be set off only against profit arising in speculation business in terms of section 73(1) of the Act. Assessee in fact claimed set off of loss from speculation business against income from tea plantation which in our view, is not admissible by virtue of the prohibition contained in section 73(1) of the Act following the judgment of the Supreme Court in Apollo Tyres Ltd.'s case (2002 (5) TMI 5 - SUPREME Court) we dismiss the departmental appeal.
|